Regulating Advertisement Won’t Make Us Behave

Do you trust yourself to make the best decisions in your own interest when it comes to what you eat, what you drink, and all the various products that you buy on the market?

If so, you must be deluded.

Otherwise, why would the government and various groups of do-gooders want to prevent you from even seeing the name of some products for fear that you may not resist the urge to buy them?

That’s the logic supporting the many regulations that exist on products such as cigarettes, alcohol and fast food. True, these products may have some negative side effects, especially when consumed in large quantities. But they are still legal and you can buy them anytime you want. Our nanny state however has decided that it needs to hold our hand and shield our eyes from temptation, because we are too immature to make that decision alone.

The zeal of government bureaucrats in imposing these rules sometimes reaches absurd heights.

Last year, the Gilles-Villeneuve Museum, located in Berthierville, Quebec, decided to stage a small exhibition of pictures of the late racing champion in Montreal during the Grand Prix. Of course, you could see the name Marlboro on several of those pictures, the cigarette company being one of Villeneuve’s major sponsors in the 1970s.

Some inspectors for the provincial department of health and social services visited the exhibition and decided that this was a crime. The museum itself is exempted from article 24.1 of the law on tobacco advertising, but not a private room open to the public in another venue. The government decided a couple of days later not to fine the museum for $2,000 after the news caused uproar in the media.

That may be an extreme case, but the trend is clear. In many countries around the world, governments are increasingly likely to regulate the advertising industry. Whether in the name of consumer protection or health concerns, advertising for products that are perfectly legal must conform to ever stricter rules.

This worldwide trend was recently highlighted by the head of planning for a well respected ad agency in the British newsweekly the Observer. He predicted that governments, instead of banning the sale of certain products outright, would increasingly turn to prohibiting their advertisement.

Along the same lines, a group of American health professionals has just called for the retirement of mascot Ronald McDonald. The same group campaigned against mascot Joe Camel in the 1990s.

This insistence on protecting consumers from themselves rests on the belief that advertising actually creates a demand for a product. Regulating or banning advertising is therefore thought of as an effective way to reduce the consumption of those products.

People who are committed to «helping» others, with or without their consent, are not inclined to question that belief. For them, it’s simply a moral imperative. But it is still possible to study social behaviour and check if this is scientifically valid.

There are certainly good reasons to doubt that advertising is required to create or sustain demand for a product. If this perception were true, the consumption of illegal drugs, for example, would not be so widespread. Similarly, the consumption of alcohol did not decrease substantially during American Prohibition.

And how to explain that the legalization of alcohol-related advertising in Saskatchewan in 1983 did not lead to increased consumption? Or that the banning of beer ads in 1974 in Manitoba did not diminish consumption in that province as compared with Alberta, where advertising remained legal?

In a case of a new product such as computer tablets, advertising of course serves to make consumers aware of its existence and to develop a new market. But for the bulk of advertising, which focuses on already established products, it simply does not increase demand.

So, you may ask, why do businesses spend so much on advertising? Quite simply to capture the largest possible market share and to steal customers from their competitors.

For example, Peter will remain indifferent to a beer ad if he never drinks beer. On the other hand, for a beer drinker like John, it is possible that the ad will lead him to choose one brand over another.

There is a large amount of empirical research that shows this to be the case. Advertising informs people about the choices available to them, or about the characteristics of certain products. But when all is said and done, the choice remains the consumer’s. What a company hopes to do when it advertises a product is promote what it can do better than its competitors and establish the best possible brand image. In this game, what one gains, another loses, and total consumption is not affected in the vast majority of cases.

There is a lesson here for governments and for those do-gooder lobby groups who want us to behave like proper children. Instead of regulating whole industries, why not give customers the information they need to make what you believe are better choices? If you think advertising is so influential, why not advertise your own theories and values and let free individuals decide for themselves?

Michel Kelly-Gagnon est président et directeur général de l’Institut économique de Montréal.